Amid some rocky periods of weak core advertising, TV stations will continue to supplement revenue sources with steady -- if only smaller -- gains from transmission fees received from cable, satellite, virtual and telco pay TV providers in the coming years.
S&P Global Market Intelligence estimates gross retransmission fees will rise 3% to $14.83 billion this year, with lower single-digit percentage gains -- growing to $15.93 billion in four years.
Earlier this year, BIA Advisory Services projected that local TV station ad revenue would decline 15% to $18.5 billion across all local TV ad platforms: broadcast, premium streaming and digital.
On a net transmission basis, TV stations will see roughly the same 48% to 50% share of retransmission dollars through 2027. Network affiliated TV stations give back around half of retransmission dollars to their TV network partners. TV stations were estimated to get $7.12 billion in net retrans dollars last year.
Major TV network affiliated stations are projected to get roughly $3.50 to $3.75 in gross retransmission revenue per subscriber, rising to just under $5.00 by 2027.
All these gains will continue as steady cord-cutting of traditional pay TV subscribers grows.
“Although traditional multichannel churn outpaced virtual subscriber gains in 2022, increases in average per-subscriber rates in renewals and annual step-ups kept gross retransmission revenues growing, albeit at a much slower pace than years prior,” says Justin Nielsen, principal analyst at S&P Global Market Intelligence.